How to Draft a Planned Gift Acceptance Policy (With Template)

Bottom Line Up Front: Securing non-cash assets and legacy commitments can transform your nonprofit, but failing to establish a formal planned giving gift acceptance policy exposes your organization to legal and financial risk. A standardized policy protects leadership, establishes clear review protocols, and ensures every contribution directly supports your mission.

Planned gifts and complex non-cash assets can transform an organization’s financial future, but accepting the wrong gift without proper oversight creates severe legal, financial, and operational liabilities. Legacy giving offers nonprofits an unparalleled opportunity to build long-term sustainability, yet illiquid contributions often come wrapped in administrative complexity.

Executive directors and board members must balance donor stewardship and risk mitigation when evaluating illiquid assets, real estate, or heavily restricted bequests. While turning down a gift feels counterintuitive to major gift development, unvetted asset transfers can drain administrative resources, trigger costly tax litigation, or leave your charity holding unmarketable property.

A formal planned giving gift acceptance policy gives board members and staff clear, pre-approved guidelines to protect the organization before complex gifts are finalized. This article explains why a gift acceptance policy is non-negotiable, outlines the core components every document needs, and provides a customizable template framework for your charity.

Why a Planned Giving Gift Acceptance Policy Is Essential

Mitigating Risk for Board Members and Executive Leadership

Accepting complex gifts without clear evaluation protocols exposes board members and executive directors to personal and legal liability for breaches of fiduciary duty. Nonprofit board members hold a duty of care and loyalty to safeguard the organization's assets. Accepting an asset with hidden liabilities, such as real estate with toxic environmental hazards or closely held stock with capital calls, directly breaches that fiduciary responsibility.

A standardized gift acceptance policy depersonalizes gift rejections, allowing leadership to decline problematic gifts by pointing to established governance standards rather than refusing a donor personally. When board members can cite a formal policy, they preserve the donor relationship while firmly protecting the nonprofit's financial boundaries.

Unmarketable Assets and Other Things to Avoid

• Real Estate Liabilities: Accepting real property without environmental site assessments can make a charity liable for pre-existing contamination or costly remediation under federal law. A Phase I environmental audit must always precede the acceptance of real property.

• Unmarketable Assets: Closely held stock, cryptocurrency, or obscure physical property can incur substantial holding fees or legal costs while remaining difficult to liquidate. Carrying costs like property taxes, storage, and insurance can quickly outweigh the asset's actual cash value.

• Overly Restrictive Terms: Bequests tied to narrow, obsolete, or impractical conditions can trap charity resources in programs the organization can no longer legally or operationally fulfill.

Core Sections Every Planned Gift Acceptance Policy Must Include

Accepted Asset Types and Standard Evaluation Rules

Your policy must define clear boundaries for routine, easily liquidated gifts versus complex assets that trigger automatic internal review. Cash, electronic funds transfers, and publicly traded securities are typically straightforward and should be approved automatically by development staff. In contrast, complex assets require rigorous evaluation rules. Here's what we recommend...

• Cash and Cash Equivalents: Accepted unconditionally without prior committee review.

• Publicly Traded Securities: Accepted standardly, with explicit rules dictating immediate liquidation upon transfer.

• Real Estate: Requires a qualified appraisal, title search, environmental review, and carrying-cost analysis before acceptance.

• Closely Held Business Interests: Requires evaluation of marketability, transfer restrictions, tax implications, and potential partnership liabilities.

• Tangible Personal Property: Accepted only if the item is marketable or can be used directly in alignment with the organization's tax-exempt mission.

• Life Insurance Policies: Accepted when the nonprofit is named as a beneficiary or owner, provided the charity is not responsible for ongoing premium payments without dedicated funding.

Gift Review Committee Structure and Authority

A robust policy establishes a dedicated Gift Review Committee to evaluate non-standard contributions. The policy should define the committee's composition, typically including the Board Treasurer, Executive Director, Legal Counsel, and Development Committee Chair.

The policy must outline the exact triggers that require committee activation, such as real estate gifts, restricted endowments, or non-publicly traded assets. It should also specify the committee's decision-making authority, reporting requirements to the full board, and documentation protocols for audit compliance.

Appraisal Requirements and Tax Compliance

Your gift acceptance policy must detail mandatory IRS compliance rules regarding qualified appraisals for non-cash gifts exceeding standard thresholds. For non-cash contributions exceeding $5,000, donors must obtain a qualified appraisal from an independent appraiser to satisfy IRS Form 8283 reporting.

To protect organizational funds, your policy must assign explicit financial responsibility for appraisal fees, legal reviews, environmental audits, and title searches. Standardizing whether the donor or the charity covers these upfront costs prevents unexpected administrative expenses. Finally, clarify the charity’s role in issuing Form 8283 acknowledgments while explicitly avoiding declaring specific property values on tax forms, as value determination remains the sole responsibility of the donor and their qualified appraiser.

Explicit Right-of-Refusal Terms and Administration

Your organization must state its explicit right to decline any gift that fails to align with mission priorities or imposes excessive operational burdens. Stating this right explicitly in public-facing policy summaries sets clear expectations with professional advisors and estate planners.

To ensure long-term flexibility, include standard variance power clauses for endowed or restricted gifts. This clause ensures the board can redirect funds if original restrictions become impossible, impracticable, or obsolete over time. Lastly, define clear procedures for selling accepted assets promptly, including default policies for immediately liquidating non-cash contributions to eliminate carrying risks.

Planned Giving Gift Acceptance Policy Template Framework

Template Overview and Usage Instructions

This template framework provides a clean, adaptable structure designed for Executive Directors and Board Officers to present to legal counsel for final customization.

Disclaimer Notice: This template framework is provided for educational and administrative planning purposes only and does not constitute formal legal advice. Organizations must consult qualified counsel to adapt the language to state laws and specific corporate bylaws.

PLANNED GIVING GIFT ACCEPTANCE POLICY TEMPLATE FRAMEWORK

SECTION I: PURPOSE & MISSION ALIGNMENT

1. Purpose: [Organization Name] actively solicits and accepts gifts to fulfill its mission of [Insert Mission Statement]. 

2. Governance Scope: This policy governs the acceptance of all planned gifts, legacy bequests, and non-cash contributions.

3. Fiduciary Duty: The Board of Directors and Executive Staff owe a fiduciary responsibility to protect the financial integrity and reputation of [Organization Name].

SECTION II: GIFT ACCEPTANCE CATEGORIES

1. Category A (Standard Approval):

   - Cash and checks.

   - Electronic funds transfers and credit card contributions.

   - Publicly traded securities (liquidated immediately upon receipt).

2. Category B (Gift Review Committee Review Required):

   - Real estate (residential, commercial, or undeveloped land).

   - Closely held securities, LLC interests, and limited partnerships.

   - Tangible personal property (art, collectibles, equipment).

   - Cryptocurrency and digital assets.

   - Restricted bequests or gifts imposing ongoing programmatic conditions.

SECTION III: GIFT REVIEW COMMITTEE GOVERNANCE

1. Committee Composition: The Gift Review Committee shall consist of the Board Treasurer, Executive Director, Legal Counsel, and Development Committee Chair.

2. Activation Triggers: Any Category B gift automatically triggers a formal review by the Committee prior to final acceptance or signature.

3. Voting Requirements: Acceptance of Category B assets requires a simple majority vote of the Committee, with major real estate or liability-bearing assets requiring full Board ratification.

SECTION IV: EVALUATION PROTOCOLS FOR COMPLEX GIFTS

1. Environmental Audits: All real estate gifts require a Phase I Environmental Site Assessment prior to transfer.

2. Appraisal Responsibilities: The donor is responsible for securing a qualified appraisal for non-cash gifts exceeding IRS thresholds. The cost of environmental reviews and title searches shall be determined prior to formal acceptance.

3. Carrying Cost Analysis: Illiquid assets will be evaluated for holding costs, insurance requirements, and liquidation timelines before committee approval.

SECTION V: RIGHT OF REFUSAL & LIQUIDATION DEFAULTS

1. Explicit Right of Refusal: [Organization Name] reserves the right to decline any gift that does not align with its mission, creates financial or operational liability, or jeopardizes its tax-exempt status.

2. Variance Power: If restrictions on a gift become impossible or impracticable to fulfill, the Board of Directors may exercise variance power to apply the gift to a closely related purpose.

3. Immediate Liquidation Policy: As a standard default, [Organization Name] liquidates all non-cash contributions, real estate, and securities immediately upon legal receipt.

Conclusion

A well-crafted planned giving gift acceptance policy serves as a vital safeguard, enabling charities to cultivate major planned gifts while protecting institutional assets and leadership. By defining committee structures, evaluation criteria, appraisal responsibilities, and explicit right-of-refusal terms, executive leaders can confidently evaluate complex opportunities without compromising governance standards.

Review your current governance documents, share this framework with your board, and consult your legal counsel to implement or update your organization's gift acceptance policy today.